What to do if your college is running into financial problems

9 Nov 2018, 10:00

Skills minister Anne Milton explains what the government is doing to support colleges in financial difficulty
A college is a multi-million pound business and leading a college is a big and important challenge. I’ve been vocal about my belief that further education can change lives, giving people new skills and opening doors to exciting jobs, education and training.
That’s why it is essential that the FE sector is well run and resilient. There are many exceptional governors, clerks and teachers working in FE. Their passion for what they do is clear to me. I want to thank these leaders and teachers for all of their hard work. However I know that some colleges do face challenges and it is vital that their boards are able to take decisive action and provide effective leadership to help improve matters.
This column gives me the chance to highlight some of the things all college leaders and boards should be looking out for in the weeks and months ahead.
This week we launched the second round of the Strategic College Improvement Fund, a £15m fund which will help those colleges struggling to improve. I’m very pleased that colleges will have the opportunity to apply for this funding. By partnering with top colleges across the country, more people will be able to access high-quality education and training. Those already successful in the first round will be announced shortly. This is great news and will build on the work already underway through the new National Leaders of Governance programme.
We also announced a new £8 million professional development programme this week, to help teachers and leaders prepare for the roll-out of new T-levels. Bespoke training will focus on preparing them for this significant change. It will also be an opportunity for teachers to update their subject and industry knowledge so it is relevant to the needs of business.
I’d encourage you to tell us early and we can talk about what kind of support might be available
In January, there will be a new insolvency regime in place for FE and sixth-form colleges. This will make sure there is an orderly process in place for managing a college if it hits financial difficulties and becomes insolvent. At the heart of this is our desire to protect learners if something goes wrong.
Of course I don’t expect large numbers of colleges to become insolvent. And while I know many of you run your colleges very well, I also know that there are colleges who have run into difficulties and have needed support from government. So if you think you’re heading into financial difficulties, I’d encourage you to tell us early and we can talk about what kind of support might be available.
Sometimes even the best of us could use a bit of help and clarity, and this can make a big difference. I’m pleased to say we will be launching practical guidance to help and support governors in their role and to fulfil their responsibilities. It will provide them with helpful examples of good practice to help run their business. The work of the FE commissioner and his team will also continue to help with early diagnostic assessments.
One area which needs some good and consistent practice is in the area of executive pay. Colleges are complex businesses but the pay of those at senior management levels should be justifiable. I would urge members of boards to think about how levels of pay will be viewed in your organisation. Does it ultimately represent good value for money for your students?
Being a college governor is an important and complex role. I know specific support and training to help carry out your role is crucial and we are about to make a serious investment in leadership and governance training. I believe this will be a very useful resource, whether you are beginning in a governor role or want to develop – good governors are one of the key drivers of good colleges. I will  soon be announcing the details of these prestigious programmes for college chairs, governors and governance professionals.
I hope all of these changes demonstrate that we appreciate the significant role colleges play in our education system, as well as the specific challenges they face. Please get involved and use the resources available because we all have an interest in building a strong and successful FE college sector together.

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